More families are collaborating to secure property

Real estate boss says now is the best time for young renters to talk to their parents about buying a property together

More families are collaborating to secure property

As the record-low official cash rate (OCR) delivers both low mortgage rates and low bank deposit rates, more and more New Zealand families are collaborating to secure a property.

Derryn Mayne, owner of Century 21 New Zealand, has commended the government’s new schemes to help first-home buyers – including lower deposit requirements. However, she pointed out that many Kiwis still can’t qualify due to income requirements and price caps in place for all singles and couples applying.

“While this month’s housing reset by the Government will help more first-home buyers, many families will still not be eligible for any assistance,” Mayne said.

“Another new rule that sees family and friends able to pool their respective $10,000 First Home Grant and KiwiSaver to buy their first home won’t actually enable many parents to trigger greater Government assistance for their kids. That’s largely because eligibility dictates that all applicants can not currently own a property, and have to commit to living in the new property for at least six months.”

Read more: More attractive first-home schemes will deliver quick and easy wins

Mayne revealed that families now realise that no one is winning when parents get nominal returns for their bank savings while their adult children pay sky-high rents.

“Now’s the time to have a talk to Mum and Dad because there are some serious win-wins to be had in this environment,” Mayne said.

She added that parents’ investment will ensure long-term capital gain, while their children will be able to get onto the housing ladder when house prices have steadied and interest rates are in the lowest in over 50 years.

“The parents might stump up the deposit and have their kids paying them back with interest. Alternatively, the parents might own a percentage of the property with their children buying them out when they go to sell their first or second home. Either way residential property in New Zealand has always proven to be a solid medium to long term investment,” she said.

“Families should get together with a mortgage broker because many will be pleasantly surprised.”

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